Choosing the right wealth manager will have a massive impact on your life. From setting you up for long-term financial success to supporting you through various financial scenarios, your wealth manager will serve as your strategic financial partner for years.
However, finding the right wealth manager can be difficult if you’re unclear about what they do, their responsibilities, and what you can expect of them.
With that in mind, here is a simple 3-step plan to help you decide how to choose the best wealth management firm.
1.) Identify Your Financial Needs
Before setting up any meetings, carefully consider your exact financial needs. This will help narrow down what you must search for in a wealth manager. In the long term, it will save you time, get your financial journey on the road faster, and better pair you with a manager who fits your needs.
Start by asking yourself, “Why do you want to use a wealth manager?” Most reputable financial advisors are likely to ask you this anyway, so having an answer ahead of time will save you time once you’re in the meeting.
Here are a few more questions to think about when choosing a wealth manager:
- What are your short-term and long-term financial goals?
- What is your risk tolerance? In other words, are you open to taking bigger risks if it means potentially earning a higher reward? Or do you like to play it safe with your money?
- Do you need help budgeting?
- Do you need help investing?
- Do you need help creating a life plan?
- Do you need to get your estate plan in order or create a trust?
- Do you need help filing taxes?
Coming prepared with a good understanding of what you’re looking for can make you a more empowered buyer. It will also make it easier for the financial professional to help you.
If you’re not sure what you’re looking for, don’t worry. Many advisors are happy to offer free consultations and help you understand what you’re looking for. For example, ARQ Wealth Advisors is always open to guiding new clients through the process and offers a free 30-minute consultation.
2.) Find the “Right” Advisor For You
Once you’ve narrowed your needs, it’s time to search for a wealth manager. There are many different types of financial advisors with many unique specialties. You may want to seek a specialist if you need help in a specific area such as tax planning, insurance, or estate planning.
However, most advisors offer a range of services. For example, ARQ Wealth Advisors offers cash flow planning, asset allocation, tax planning, retirement planning, and more.
In general, there are three types of wealth managers:
- Robo-Advisors: These are digital-only advisory services offering affordable basic services. In most cases, you’ll create an online profile and the robo-advisor will invest your money in a pre-generated portfolio based on the information that you provide.
- Online Financial Planning Services: Many advisors offer access to wealth management services that are entirely online. These services will pair you with a financial advisor over the phone or Zoom without ever needing to meet in person.
- Local Advisors: If you want a high level of financial and investment strategy, the best option is to explore local wealth managers in your area. You will be able to meet with your advisor face-to-face to discuss your financial needs. If you’re located in the Scottsdale, AZ, or Denver, CO, area, ARQ Wealth Advisors can help.
Remember, there is no “right” option when choosing a wealth manager. The option that’s best for you will depend on what you’re looking for. If you have unique financial needs that require more customization, your best option is to find a local advisor who you trust.
Robo-Advisors:
- Good for people who: need help with basic investing, such as investing or saving for retirement. Robo-advisors have low management fees and account minimums, making it easy to get started.
- Look elsewhere if: you need more in-depth financial planning. Robo-advisors tend to offer pre-generated portfolios with little customization. They also typically do not offer many services outside of basic investment and retirement planning.
Online Financial Planning Services:
- Good for people who: want some level of customization with their financial planning but don’t need to meet their advisor in person.
- Look elsewhere if: you are looking for rock-bottom fees or highly customized services.
Local Advisors:
- Good for people who: are looking for comprehensive wealth management services where they can meet with their advisor frequently.
- Look elsewhere if: you do not need a bespoke, personalized financial plan.
What else to know when choosing a wealth management company
Here are a few other things to know when choosing a wealth manager
- Consider their credentials: It’s typically advisable to look for financial professionals with credentials like Certified Financial Planner (CFP®), Registered Investment Advisors (RIAs), Chartered Financial Analyst (CFA), Certified Public Accountant (CPA), or Chartered Wealth Manager (CWM). These qualifications show that the advisor has completed years of rigorous training and likely has high ethical standards.
- Fiduciary Duty: Some advisors (not all) have a legal responsibility to act in your best interests. This means they must invest your money responsibly to benefit you (not them). When meeting potential wealth managers, ask if they are a fiduciary. At ARQ Wealth, all of our advisors are fee-only fiduciaries.
- Compensation Structures: You’ll also want to consider how your advisor gets paid. Most advisors get paid via a commission, an hourly fee, or a flat monthly or annual fee. Look for advisors that align with your goals. This usually means avoiding advisors who earn commissions by selling you financial products. At ARQ Wealth, we leverage a fee-only structure that eliminates any conflicts of interest.
Finally, it’s time to talk about the final step when choosing a wealth management company.
3.) Consider Your Budget & Make a Decision
By this point, you know what your financial needs are and how to find a wealth manager that’s right for you. Now, it’s time to consider your budget and make a decision.
- If you need essential investment services at a low price then you’re best off with a robo-advisor.
- If you need affordable financial planning, an online financial planning service is the best option.
- If you need in-depth financial planning and investment management services, you’re best off working with a local wealth management firm.
If you are choosing between different wealth management firms, vet all options extensively. This means checking each firm’s website for testimonials, reading reviews on third-party websites, or asking your friends and family if they have heard of the firm and their opinions.
If you’re working with a financial advisor, verify their background by looking up their Form ADV before agreeing to work with them. Other sites, like FINRA’s BrokerCheck, will allow you to conduct more due diligence on your advisor. This website will give you a snapshot of a broker’s employment history, regulatory actions, investment-related licensing information, and complaints.
Looking for a Wealth Manager in Scottsdale?
After going through the steps above, are you interested in working with one of the top wealth managers in Arizona? If so, look no further than ARQ Wealth Advisors.
ARQ Wealth Advisors’ team of Certified Financial Planners is committed to helping you reach your retirement goals by implementing all-inclusive tools for financial planning, investment advisory services, and wealth and portfolio management. To set up a free consultation, call (480) 214-9572 or schedule a consultation today.
At ARQ Wealth Advisors, we aim to be more than just a financial advisory firm. We want to be your trusted partners in creating a prosperous financial future.
